Loblaws’ ‘Middle Mile’ Autonomous Vehicles and the Future of Grocery in Canada: Sylvain Charlebois

Date:

Share post:

Loblaws is partnering with Gatik, an autonomous vehicle provider from the United States, to launch the first autonomous food delivery fleet. This is a solution for the “middle mile”, which will assure links between distribution centres and stores. Consumers will not see autonomous vehicles driving up to their homes yet, but that day will surely come soon.

These cold-chain, capable, boxed vehicles which are not very large, have already been roaming Toronto’s streets for some time for another grocer. They even experienced last year’s winter, so Gatik is aware of potential perilous road conditions when operating its fleet. Captured data by Gatik will give the company the experience needed to make the supply chain more efficient.

What is driving this decision is clearly e-commerce. The “middle mile” is where gains can be exponential even though the last mile may be the costliest. This is the obscure part of the supply chain consumers do not see but are severely affected by. Food prices are more manageable when costs are under control. With this partnership, Loblaws will be able to move food from automated picking facilities multiple times a day to support their PC Express online grocery service in the Greater Toronto Area. The fleet will likely be expanded as this partnership is being presented as a long-term work-in-progress, if you will.

Online sales by grocers have increased almost 90% since October of 2019. For Loblaws, online sales growth is almost at 200% compared to last year. In food retail, online sales represent close to 3.3% of all sales compared to 1.7% last year, according to Nielsen. This is just incredible growth. With such a market shift, some supply chain adjustments are required. Unlike Sobeys, which is creating a unique and independent infrastructure to develop Voilà by Sobeys, Loblaws is opting to make its supply chain more cyber-friendly. Both approaches can work. With these initiatives, grocers gain the ability to make more money online, something they have hesitated to do for years. For a few years, grocers were dithering with the concept. With COVID-19, grocers are fully committed now. Moving forward, they will want us to buy more food online, and will get better at providing this service.

Loblaws autonomous vehicles outside Loblaws office. Photo: Loblaws
Loblaws autonomous vehicles outside Loblaws office. Photo: Loblaws

Vehicles operated by Gatik will not be entirely autonomous, however. All vehicles will have a safety driver as a co-pilot for now. Since consumers are connecting with these vehicles, the approval process will probably be faster, but neither Gatik nor Loblaws could say when the autonomous fleet would be driving around without any humans at all. It is essentially just a matter of time.

Eliminating humans from the food supply chain is an option which has gained currency throughout the pandemic. For one, jurisdictions around the globe managing routes have struggled and have had to think about restaurants, rest areas and how to keep truckers and staff safe while keeping the region food secure. Humans, as vectors for transmitting the virus, or any disease for that matter, are seen as a liability when a public health crisis occurs. Supply chains are increasingly becoming more automated, so Loblaw’s move with Gatik is anything but surprising.

This human-less food supply chain is an ideal for now, but Loblaws’ call is significant enough to allow most of us to dream. Given the economics of food distribution in Canada though, this innovation is unavoidable, and Loblaws appears to be out of the gate first, embracing what lies ahead. Digitizing the supply chain can only help grocers better serve the Canadian market. With such a vast country, with few people living in it, making the middle mile more efficient is key. It does not necessarily mean that Loblaws’, or any other grocer’s intent is to eliminate all human involvement in the handling of food throughout its operations. It will however seek different skills and knowledge to support its online ambitions. The sector needs strong employees, and always will. But as the sector morphs into an omnichannel beat of sort, employees will be expected to play different roles, and most of the work will have to be about data management, not handling food per se.

The last mile is an autonomous fleet’s next frontier, the most exciting one for the industry, and likely for us as well. Canadians may not be there yet, but grocers like Loblaw are signaling to the Canadian public that the horse has left the virtual barn.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.

Good Neighbour ‘Lifestyle Department Store’ Expanding with a New Flagship in Toronto’s Summerhill [Interview]

The unique retail concept that launched 10 years ago in Leslieville has grown its offerings with its newest location catering to locals with a range of produces and a beverage lounge.

Anatomy of a Leader: Ian Rosen, President and COO of Harry Rosen

Rosen discusses his life up to becoming head of the luxury menswear retailer, and discusses what's been happening with the family as new leadership emerges.

Mid-Market Retailers in Canada Navigating Challenges and Opportunities as Consumers Shift [Op-Ed]

Jared Gordon discusses challenges facing mid-market retail, such as declining consumer interest and competition from discount and luxury sectors. Mid-market retailers need to adapt to survive he says.

Canada Ranks Highly for Seamless Retail Experience, Embracing Digital and In-Store Integration: KPMG Report

The report says that Canadian retailers are improving blending online and in-store with a majority of Canadians preferring an in-store experience, necessitating seamless channel integration.

Indigo Books & Music to Go Private After Sale to Schwartz-Controlled Holding Company: Expert Commentary

The Canadian retailer is able to turn itself around privately after much public turmoil, according to experts, though its future remains uncertain with limited scrutiny.

Shift in Yorkville Retail as Harry Rosen Prepares to Relocate Bloor Street Flagship [Podcast]

Craig and Lee discuss Harry Rosen's flagship store moving from Bloor Street to Cumberland Street in Toronto's Yorkville, marking a significant shift in the area's retail landscape.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Flexible Work Company ‘LAUFT’ Discusses Expansion Plans and New Government Collaboration [Interview]

Founder Graham Wong discusses the Canadian company's plans for new locations, enhanced spaces for events and content creation, and a future in places such as airports and hotels.

Ice Bath Spa Concept ‘Othership’ Opens 2nd Toronto Location with Expansion Plans for Major Markets in Canada and NYC [Interview]

The company's co-founder discusses the concept that began in his back yard in 2019, which is now a big business with a new Yorkville location and plans for Manhattan and other urban centres.

Anatomy of a Leader: Peter Mammas, President and CEO, Foodtastic

The man behind the food empire got started in Montreal where he wanted to be a pilot, then an architect. He eventually worked his way up in the world of foodservice, where he found his passion.

Nostalgia vs Reality: Exclusive Poll Shows Canadians Warm to Zellers’ Return but Hesitate to Shop One Year After Relaunch

Zellers relaunched a year ago as shop-in-stores at Hudson's Bay, and a poll done for Retail Insider shows that Canadians' think the current offerings fall short.

Cracking the Newcomer Code: Study Urges Canadian Retailers to Adapt for Inclusivity as Immigrants Reshape Retail Trends [Feature]

Making newcomers feel at home could mean increased sales for retailers. Ian Large of Leger says retailers should collaborate with communities as Canada's population changes.

Italian-Themed QSR Chain Fazoli’s Announces Major Expansion into Canada with 25 Locations Planned [Interview]

The chain could open even more locations according to its development officer, who discusses Fazoli's success being rooted in quality ingredients and speedy service.

Toronto-Based Fashion Designer Adam X Discusses Inspiration, Retail and Designing for the Future [Video Interview]

Craig and Adam X discuss the the founding and ethos of Adam X Atelier, a Toronto-based haute couture fashion brand which is rare to find in Canada.

Swatch Opens Flagship Store in Downtown Vancouver as it Expands Across Canada [Photos]

It's the 12th store in Canada for the popular Swiss watch brand, which almost doubled its store count in this country in less than a year.

Economic Strains Dampen Montréal’s Retail Growth, But Luxury and Transit Projects Could Spark Revival: JLL Report

Montreal retail has struggled recently and leasing activity has been particularly slow downtown, while a new luxury mall and a growing transit network could help things this year.

IKEA Canada Launches ‘Second-Hand Tax’ Initiative in Protest of Government Policies [Interview]

Ikea dropped the tax on its 'as-is' marketplace, stating that second-hand goods should not be subject to the same taxes as new products.

Significant Variances in Food Price Changes Not Reflected in Statistics Canada Numbers [Op-Ed]

Sylvain Charlebois says that StatCan numbers on food inflation do not reflect the reality of what consumers are seeing at the grocery store.

US-Based Women’s Fashion Brand Windsor Announces First 5 Canadian Stores, Plans National Expansion [Interviews]

The fashion brand is expected to be a runaway success in Canada, with an existing customer base and a void in the market.

Chop Steakhouse Set to Open in Downtown Toronto, Continuing an Influx of New Restaurants to the Financial District [Feature]

Chop Steakhouse is joining a number of new restaurants and dining options that have opened recently in the Financial District, as the area starts the journey back from a pandemic that took a huge toll on the core.

Virtual Reality Arcade Concept ‘Ctrl V’ Expanding in Canada and the US Following Pandemic Setback [Interview]

The world's first and largest VR arcade franchise is opening new locations across Canada and the US, seeking spaces of about 4,000 square feet.

Good Neighbour ‘Lifestyle Department Store’ Expanding with a New Flagship in Toronto’s Summerhill [Interview]

The unique retail concept that launched 10 years ago in Leslieville has grown its offerings with its newest location catering to locals with a range of produces and a beverage lounge.

Anatomy of a Leader: Ian Rosen, President and COO of Harry Rosen

Rosen discusses his life up to becoming head of the luxury menswear retailer, and discusses what's been happening with the family as new leadership emerges.

Mid-Market Retailers in Canada Navigating Challenges and Opportunities as Consumers Shift [Op-Ed]

Jared Gordon discusses challenges facing mid-market retail, such as declining consumer interest and competition from discount and luxury sectors. Mid-market retailers need to adapt to survive he says.

Canada Ranks Highly for Seamless Retail Experience, Embracing Digital and In-Store Integration: KPMG Report

The report says that Canadian retailers are improving blending online and in-store with a majority of Canadians preferring an in-store experience, necessitating seamless channel integration.

Indigo Books & Music to Go Private After Sale to Schwartz-Controlled Holding Company: Expert Commentary

The Canadian retailer is able to turn itself around privately after much public turmoil, according to experts, though its future remains uncertain with limited scrutiny.

Shift in Yorkville Retail as Harry Rosen Prepares to Relocate Bloor Street Flagship [Podcast]

Craig and Lee discuss Harry Rosen's flagship store moving from Bloor Street to Cumberland Street in Toronto's Yorkville, marking a significant shift in the area's retail landscape.